October, 2013 Political Class Insanity, Part 3: An Underpaid/Delusional Congressman, Banks Still Rule, and More

Please note: Nancy Pelosi recently made the outrageous comment that there was no waste to be cut in the Federal govnerment, i.e. EVERY dollar the Washington political class spends is essential to our country. Keep this insanity in mind as we go through this month's polticial class insanity, you will quickly see that she is very much out of touch with the reality of today's wasteful federal government.

This is the third in a series to review the latest insanity, lunacy and antics from the American political class. The first two posts were quite depressing. We saw politicians getting richer, fraudsters getting richer, bridges ready to collapse around the country, and more. As a warning, the insanity today and in subsequent days will be as bad, as wasteful, and as depressing as the insanity we have covered this month and in the years leading up to this month. The number of politicians stays the same but the idiocy they come up with, the ineptness they exhibit, continues to grow exponentially.

1) Over 20 million Americans are unemployed or under employed. The average/median household annual income in this country has dropped substantially since AFTER the recession ended and is now about $50,000. The price of gas is up about 80% since Obama took office. Food stamp recipients now total over 47 million Americans, an all time record by far.

And what does a current member of Congress think about his salary, currently about $172,000 a year with outstanding benefits to boot? According to  recent Politico article, one lawmaker, Congressman Phil Gingrey,  said he’s “stuck” making $172,000 a year, while Congressional aides will go on to make in big bucks lobbying on K Street, according to a National Review report. Staffers “may be 33 years old now and not making a lot of money. But in a few years they can just go to K Street…and make $500,000 a year. Meanwhile I’m stuck here making $172,000 a year,” Rep. Phil Gingrey (R-Ga.) said, according to the National Review.

He is “stuck making $172,000” while tens of millions of Americans cannot even find a job or need help putting food on the table. He is “stuck” making three times more in salary than what the typical American family makes. And it is not like the Congressman is poor. According to Politico, quoting the National Review reports, his net worth is about $3 million. 

We are truly living in a “Hunger Games” country when the country is suffering dire economic stress and a Washington politician complains about only making $172,000.

2) The U.S. healthcare industry can make you shudder. According to Aetna, in the United States, we spend over $2.3 TRILLION a year on health care. No other country in the world spends more but 32 other countries in the world have higher average life expectancies. 

This comes out to over $10,000 a year for every single American citizen but we still rank 33rd in the world. And Obama Care is likely to make us spend more and fall further down the rankings since the legislation never looked at the root causes of the $2.3 TRILLON expense.

3) According to a recent article from the New York Post, that was reviewed in the September 30, 3012 issue of The Week magazine, in just 2001 alone former Congressman Robert Kennedy, Jr. had sexual trysts with 37 different women. He tracked and categorized these trysts, along with annotations, in a diary that the Post had obtained.

Kennedy, whose wife committed suicide last year, is just another politician whose respect for his spouse, his word of honor, his constituents, and his public office is no better than the politicians who came before him, e.g. Weiner, Spitzer, Edwards, MacGreevey, Sanford, Ensign, his uncle JFK, etc. If you are having affairs with 37 different women, it is a lot tougher focusing on the government work of the people.

4) An article in the December, 2012 issue of Reason magazine gave a stunning example of how government spending and mismanagement of taxpayer wealth is so out of control, using the Chicago city government as an example:

• While trying to get its out-of-control budget tamed, between 2003 and 2012 the city of Chicago eliminated more than 8,000 city jobs, about 20% of its workforce.
• However, according to a recent analysis from the Illinois Policy Institute, the cost of health care for the remaining employees’ jumped 29% in 2012.
• Additionally, from 2003 to 2012 the annual cost of a city employee on the city payroll jumped from $58,299 per employee to $96,082.
• Thus, with 20% fewer employees compared to 2003, the city is paying out $700 million more a year for 20% fewer employees vs. 2003. 
• Far fewer employees and far more costs, you cannot make this stuff up.
• But it gets worse since on the current budget trend, the city must find a way to increase its annual contributions to the employee pensions fund by almost three fold, from $476 million a year to $1.2 billion a year by 2015.

Needless to say, unless some drastic cuts are taking soon, the city is going pull a “Detroit” in the next few years despite cutting a fifth of its workforce. This is the poster child for out-of-control government spending when you slash staff but increase your staffing budget.

5) I get a little sense of relief when I find out that at least our politicians are no different when it comes to politicians around the world in wasting taxpayer money. The latest issue of Business Week has some information on how the Chinese government has gone overboard building infrastructure in China and has allowed loose credit policies (are you listening, Federal Reserve board) to result in the building of new towns and special zones that have gone unused and unoccupied because while the government said to build and encouraged building. The immutable forces of the market said there was no need or demand for the build outs.

 One of the most glaring examples of taxpayer wealth wasted  is the building of a new airport in a far flung city in the western Chinese hinterlands in the Xinjiang province. The new airport has four check-in counters and handles a grand total of two flights a DAY. Thus, wasting taxpayer money does not appear to be a uniquely American political talent.

6) On January 21, 2010, President Obama stated: “I’m proposing a simple and common sense [financial] reform, which we’re calling the Volcker Rule, after this tall guy behind me.” The Volcker rule that he proposed was to ensure that banks could not make investment bets and investments that would stick American taxpayers with the bill if the banks ended up failing, much like what happened in the Great Recession. 

Simple enough. When the Dodd-Frank financial industry reform legislation was passed, the Volcker rule encompassed 12 pages of the final bill. Three years later, the rule has still not been written into formal, enforceable regulations. The unfinal, unapproved regulations now run 530 pages long and we still do not have an answer of how to do this simple thing.

Deadlines for enforcement continue to be missed and you can be sure that many lawsuits will ensue since translating 12 pages of law into well over 500 pages of regulations is going to tick off some people regarding the intent of the original 12 pages and the effect of over 500 pages.

Whenever something can be done simply, you can be sure that our political class will make longer, more difficult and less effective.

7) Speaking of financial matters and the Great Recession, a graphic from a recent issue of Business Week showed how much taxpayer money that the Federal government gave to bail out the firm AIG actually passed through AIG and directly into the hands of foreign banks:

• Canadian banks got $1.4 billion of American taxpayer wealth
• French banks got $20.8 billion
• British banks got $2.6 billion
• German banks got $10.8 billion
• Swiss banks got $3.8 billion
• Netherlands banks got $.6 billion
• Total = $40 billion of American taxpayer wealth ended in the vaults of foreign banks.

Which obviously raises the question of why were foreign banks relieved of the responsibility for their stupid decisions in the marketplace? And why were American taxpayers forced to pay for their stupid decisions?

That $40 billion could have been used to:

• Give every American household a $350 tax rebate.
• Could have kept the White House tours operating for 40,000 years.
• Could have put a trained, armed police professional in every U.S. school for about five years to prevent future Newtown like shootings.

Never underestimate the ability of the American political class to take care of bankers and itself from a financial backer and donor perspective. And now they have expanded to take care of overseas bankers also.

Enough insanity for today but tomorrow brings another day and another batch of lunacy from our politicians.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now:http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.robertringer.com/http://www.youtube.com/watch?v=08j0sYUOb5w

The Selling And Buying Of America, Part 1: A Historical Perspective

Although many of us suspected it for a while, I think that recent actions by the Washington political class pretty much sum up the fact that America, and the government and politicians that supposedly lead it, is for sale. Today, we will look at the historical aspects of politicians selling America to the highest bidders, as reported in this blog. Tomorrow, we will talk about the latest atrocities as we will see that the selling of America, and the taxpayer wealth and liberty that goes with it, continues unabated today.

Before we get to tomorrow and we review the latest deals that cinch the deal that America is for sale, let’s review some of the other actions we have reported on in this blog that gave us an inkling that America truly was for sale to the highest bidders, with the Washington political class conducting the auction:

- In our book, “Love My Country, Loathe My Government,” we reported on a newspaper article from the St. Petersburg Times that ran on December 11, 2008. The article reviewed how AIG, Goldman Sachs, and Freddie Mac had contributed $3.1 million to the 2008 Republican and Democratic national conventions. Is it a coincident that these three companies were some of the biggest recipients of taxpayer money in the bank bailout giveaway that the Democrats and Republicans approved just months later?

- From our post of February 11, 2010, we gathered a number of credible news sources and documented the latest selling of America shenanigans at that time:

http://loathemygovernment.blogspot.com/2010/02/dump-incumbents-week-part-4.html):

• Georgia Senator Isakson - Arranged a $4 million earmark for Northrop Gruman in exchange for a $7,000 donation and arranged a $1.6 million earmark for Scientific Research Corp. in exchange for a $2,900 donation. (Source: Seattle Times)
• Hawaiian Senator Inouye - Secured a $135 million taxpayer financed bailout after intervening on behalf of a poorly managed, non-qualifying bank. Why? Inouye had most of his net worth invested in that bank. (Source: Hawaii Free Press
• Illinois Senator Durbin - Arranged a $1.6 million earmark for Gentex in exchange for a $2,000 donation and arranged another $1.6 million earmark for Epir Technologies in exchange for a $2,700 donation. (Source: Seattle Times) Also, Durbin sold off $42,696 of mutual fund shares on Sept 19, 2008, immediately after a confidential briefing and legislative directive pertaining to the impending financial crisis and banking bailouts. By the end of the month and before the October market collapse, he had sold off $115,696. (Source: Washington Times)
• Indiana Senator Bayh - Arranged for an earmark of $800,000 for General Atomic Technologies in exchange for a $1,000 donation and arranged an earmark of $800,000 to Briartek in exchange for a $2,500 donation. (Source: Seattle Times)
• New York Senator Gillbrand - Received ACORN's endorsement for her re-election, stating "I am honored to have the endorsement of ACORN and proud to partner with them on an agenda...". She then voted to funnel taxpayer money into ACORN even AFTER the videos surfaced showing a pattern of illegal and immoral activity within the ACORN organization. (Source: The Albany Project)
• North Carolina Senator Burr - Arranged a $4.5 million earmark for General Dynamics in exchange for a $10,000 donation and arranged for a $2 million earmark for E. I. DuPont DeNamours in exchange for a $5,000 donation. (Source: Seattle Times)
• Vermont Senator Leahy - Arranged for a $10 million earmark for General Dynamics in exchange for a $18,200 donation and arranged for a $1.6 million earmark for Goodrich in exchange for a $7,500 donation. (Source: Seattle Times)
• California Congresswoman Sanchez - Sanchez paid three of her sister Loretta's Congressional staff members from her district's federal budget funds when Loretta's office was short on funds. (Source: http://www.washingtonpost.com/). Sister Loretta arranged an earmark of $800,000 for Irvine Sensors in exchange for a $3,800 donation and arranged an earmark of $1.6 million for Digibeam Corp. in exchange for a donation of $3,800. (Source: Seattle Times) Still not done, the Congresswoman earmarked $3.2 million to PMA clients in exchange for a donation of $60,118. (Source: FreeRepublic.com)
• Iowa Congressman Boswell - Boswell arranged an earmark of $3.5 Million for Goodrich Corp in exchange for a donation of $3000. (Source: Seattle Times)
• Congressman Capuano - Arranged an earmark of $2.8 million for PMA clients in exchange for a donation of $54,000, arranged an earmark of $2 million for Parametric Technology in exchange for a donation of $3,500 and arranged an earmark for $800,000 for ABT Associates in exchange for a donation of $1,250. (Source: Seattle Times Favor Factory Investigation)
• Massachusetts Congressman Frank - According to Judicial Watch, Frank allegedly used his influence to secure a $12 million infusion for a hometown bank that did not qualify based upon TARP program legal criteria. Additionally, Frank was a knowing and key contributor according to Judicial Watch to the housing and financial crisis of 2008 through his dogged support of Fannie Mae risky loan practices, a company that funneled more than $40,000 to his campaign funds and a company where his life partner worked as an executive. (Source: www.businessandmedia.org.
• Massachusetts Congressman Markey - According to www.TheHill.com, Markey requested federal regulatory investigations against a CEO and his company immediately after the man's testimony indicated that Markey's cap-and-trade bill would result in burdensome cost to citizens with little to no change or benefit in emissions.
• New Jersey Congressman Pascrell - Arranged a $4 million earmark in exchange for a donation of $2,000. (Source: Seattle Times)
• New Jersey Congressman Rothman - Arranged earmarks worth $3.2 for PMA clients in exchange for a donation of $4,000 and arranged an earmark of $4 million to ITT in exchange for a donation of $17,000. (Source: Seattle Times)
• Ohio Congresswoman Kaptur - Kaptur doesn't even try to pretend she is helping her district. She arranges earmarks for donating companies from other states. The Seattle Times reports two such in Virginia. American Systems Corp and Impact Engineering each received generous taxpayer earmark gifts from Kaptur of $4 million after donating $15,000 and $3500 respectively to Kaptur's re-election campaigns. According to www.FreeRepublic.com, Kaptur also involved herself in the PMA scandal by earmarking $1.6 million for their clients after receipt of PMA lobbying donations of $34,500.
• Ohio Congressman Turner - According to the Wall Street Journal, Turner spent $1435 of taxpayer dollars on a digital camera. Yes, small potatoes compared to others in the House but abuse is abuse.
• Tennessee Congressman Wamp - Arranged an earmark of $2.8 million for PMA clients in exchange for a donation of $23,900 and arranged an earmark of $1.52 million for Radiance Technologies in exchange for a donation of $5,000. (Source: Seattle Times)
• West Virginia Congressman Mollohan - According to NLPC, Mollohan appropriated well over $100,000,000 in taxpayer funds through earmarks for non-profits that he set up and staffed with friends.

- The selling of America and how it often benefited the families and friends of politicians was reviewed in our February 27, 2012 post:

http://loathemygovernment.blogspot.com/2012/02/waste-to-left-of-them-waste-to-right-of.html):

• Rep. Robert B. Aderholt (R - Ala.) - Since 2008, Aderholt has helped secure about $440,000 for the University of Montevallo while his wife served on the university's board of trustees.
• Rep. Todd Akin (R - Mo.) - Between 2005 and 2009, Akin helped secure $3.3 million to upgrade part of Route 141 in his district west of St. Louis. Less than a half-mile east of Route 141, Akin and his family own nine acres. Akin's family has applied to construct six homes on the land.
• Rep. Robert E. Andrews (D - N.J.) - Andrews has helped secure $3.3 million over the past decade for a scholarship program at Rutgers School of Law in Camden, N.J., where his wife is an associate dean in charge of scholarships and special legal programs.
• Rep. Roscoe G. Bartlett (R - Md.) - Bartlett, since 2005, has helped secure about $4.5 million toward improving Interstate 270 and Buckeystown Pike. From there, Buckeystown Pike leads south and west to Bartlett's home, his farm and rental properties that earn the lawmaker up to $150,000 a year.
• Rep. Rob Bishop (R - Utah) - From 2007 to 2009, Bishop requested earmarks worth more than $1.5 million for Weber State University in Ogden, Utah. His son, Shule, was hired there in 2010 as a state government lobbyist.
• Rep. Sanford D. Bishop Jr. (D - Ga.) - News organizations in Georgia reported that Bishop helped secure nearly $200,000 in 2008 and 2009 for a middle school mentoring program that employed Bishop's stepdaughter and her husband.
• Rep. Corrine Brown (D - Fla.) - Between 2005 and 2010, Brown helped secure $21.9 million for six clients of a lobbying firm where her daughter works.
• Rep. G.K. Butterfield (D - NC) - Butterfield has helped obtain $817,500 over the past few years toward revitalizing buildings in Wilson, N.C. The lawmaker owns 19 properties within three-quarters of a mile of the project.
• Rep. Norm Dicks (D - Wash.) - In 2008, Dicks, as an appropriations chairman, secured a $1.82 million earmark for a Washington state environmental agency where his son worked as executive director.
• Rep. Kay Granger (R - Tex.) - Over the past decade, Granger has helped obtain $51.9 million in earmarks toward a project to makeover downtown Fort Worth and reroute the Trinity River. Until 2010, Granger co-owned a condominium building with her son about a half-mile south of the project. Her son is director of the group in charge of the project.
• Rep. Maurice D. Hinchey (D - N.Y.) - In Saugerties, a village in upstate New York, Hinchey in 2005 earmarked $960,000 to upgrade downtown streets. In 2009, he secured $800,000 to overhaul sewer lines. Hinchey is a partner in a hotel development in the heart of the village and values his interest at $250,000 to $500,000.
• Rep. Rubén Hinojosa (D - Tex.) - In 2009, Hinojosa obtained a $665,000 earmark to help widen a road next to a 3.7-acre commercial property that his family partnership was developing and near the family food processing plant in Mercedes, Tex.
• Rep. Sheila Jackson Lee (D - Tex.) - Jackson Lee helped secure about $5.3 million to the University of Houston in 2009 and 2010 while her husband was vice president of student affairs and vice chancellor of student affairs for the university system.
• Sen. Tim Johnson (D - S.D.) - In 2008, Johnson, along with seven other Senators, added $4 million to a Pentagon program to fund math and science education called STARBASE. Johnson's wife worked as a contract employee evaluating the program between 2005 and 2011.
• Rep. Jack Kingston (R - Ga.) - Kingston co-sponsored a $6.3 million earmark in 2008 to replenish the beach on Tybee Island, where he owns a cottage about 900 feet from the beach. "It's absurd to suggest that this benefits me," he said. No, Congressman, it's absurd to think it doesn't.
• Rep. Robert E. Latta (R - Ohio) - Latta co-sponsored $2.8 million in earmarks in 2009 and 2010 for water and wind research at Bowling Green State University at the time that his wife was a university senior vice president.
• Rep. Daniel Lipinski (D - Ill.) - Lipinski cosponsored $2.5 million in earmarks since taking office in 2005 for rail projects overseen by the Chicago Transit Authority. The Chicago Sun-Times reported that the CTA is a lobbying client of his father, William Lipinski, a former congressman. The CTA has paid William Lipinski $766,330.20 in lobbying fees since 2007.
• Rep. Frank A. LoBiondo (R - N.J.) - Since 2008, LoBiondo has helped secure $4.68 million for beach monitoring and nourishment along the shores of Ventnor City, N.J., where he and his wife own a home about 850 feet from the beach.
• Rep. Candice S. Miller (R - Mich.) - Miller secured a $486,000 earmark in 2006 to help add a 14-foot-wide bike lane to a new bridge over the Clinton River, about 900 feet from her home. "People earmark for all kinds of things," Miller said. "I'm pretty proud of this; I think I did what my people wanted. Should I have told them, 'We can never have this bike path complete because I happen to live by one section of it.' No, Congresswoman, you should have told your "people" to pay for it themselves without Federal money.
• Rep. Gary G. Miller (R - Calif.) - Miller secured $1.28 million in earmarks in 2005 to help repave, re-landscape and install new drains along Grand Avenue in Diamond Bar, Calif. The project, previously reported by The Inland Valley Daily Bulletin of Ontario, upgraded an access road for a residential and retail development that he co-owned with a campaign donor. Miller sold the property months after securing the earmark.
• Rep. Ed Pastor (D - Ariz.) - Between 2005 and 2010, Pastor earmarked about $4 million from an Energy Department agency tasked with securing the nation's nuclear weapons stockpile to a program for at-risk teenagers at Maricopa Community Colleges. His daughter runs the program.
• Rep. Nancy Pelosi (D - Calif.) - Over the past decade, the House minority leader helped secure $50 million in earmarks toward a light-rail project that provides direct access to San Francisco's Union Square and Chinatown for neighborhoods south of Market Street. Pelosi's husband owns a four-story commercial building blocks from Union Square.
• Rep. Nick J. Rahall II (D - W.Va.) - In 2005, Rahall helped secure $20 million toward a parking garage with a bus and taxi facility in downtown Beckley. The project is about a half-mile from his son's home, less than one mile from a commercial property owned by the lawmaker, and a little more than a mile from his residence.
• Sen. Harry M. Reid (D - Nev.) -In 2004 and 2005, the Senate majority leader secured $21.5 million to build a bridge over the Colorado River, linking the gambling resort town of Laughlin, Nev., with Bullhead City, Ariz. Reid owns 160 acres of undeveloped land in Bullhead City.
• Rep. Harold Rogers (R - Ky.) - Rogers has helped earmark $7.1 million since 2002 to a project that made over a half-mile strip of College Street where Rogers has his residence. The project narrowed parts of the street to slow traffic, buried overhead utilities, rebuilt sidewalks, paved streets and installed new driveway aprons, curbs and decorative lamps.
• Rep. C.A. Dutch Ruppersberger (D - Md.) - Ruppersberger helped obtain $187,000 in 2008 toward a beach replenishment survey of the Ocean City shoreline. He and his wife own two condominium units there.
• Sen. Richard C. Shelby (R - Ala.) - Shelby has earmarked more than $100 million toward rebuilding downtown Tuscaloosa, Ala., where he owns an office building. The street in front of the building will be redone as part of phase two of the project.
• Rep. John F. Tierney (D - Mass.) - Since 2005, Tierney has helped secure about $3.5 million toward a 950-space parking garage and commuter rail station in Salem, Mass. The facility will be about a quarter-mile from a commercial building the Congressman co-owns.
• Rep. C.W. Bill Young (R - Fla.) - Over the past decade, Young helped secure $73 million for companies that employed his sons. One worked as a security administrator in the St. Petersburg office of Science Applications International Corp., a defense contractor; the other as an outreach specialist for the National Forensic Science Technology Center.
  

- Our August 14, 2012 post:

http://loathemygovernment.blogspot.com/2012/08/the-slime-sleaze-immorality-and_14.html)

considered a whole slew of corruption and slime that came to light in a Business Week magazine article within their Spring, 2011 Government Insider Special report:

• New Jersey Senator Robert Menendez recently "championed" a plan to provide a temporary tax cut for small companies, a tax cut that would allow them to offset investments these companies might make in research on therapies to prevent and treat chronic diseases. Oh, by the way, the pharmaceutical industry in New Jersey just happened to contribute $434,043 to his 2010 reelection campaign and PAC.
• Michigan Senator Debbie Stabenow sponsored a bill to give a tax rebate for consumers who purchase a gas/electric car or truck. The recently available Chevy Volt from General Motors certainly falls within this category. Oh, by the way, General Motors employees contributed $84,635 to Stabenow's reelection campaigns between 1995 and 2010.
• New York Senator Charles Schumer has been accused by other Congressional members of making a proposed tax on carried interest of private equity managers so difficult that the measure never was passed into law. Oh, by the way, Schumer has received $8.8 million from the security and investment industry since 1989, an industry that certainly includes private equity managers.
• Montana Senator Max Baucus obtained a provision in a recent farm bill "for tax exempt forestry conservation bonds to help purchase a 500 square mile patchwork of land owned by Plum Creek Timber." Oh, by the way, Plum Creek Timber has spent $3.7 million in lobbyists fees from 2006 to 2010 and its employees have contributed $19,100 to various Bachus reelection campaigns.
• Iowa Senator Charles Grassley has backed tax credits for domestic production of corn based ethanol and tariffs on imports of ethanol. It just so happens that his home state has 40 ethanol plants that generate 3.5 billion gallons of ethanol each year. Oh, by the way, Grassley received $290,250 in reelection campaign donations from agriculturally based PACs in his 2010 election run.
• Arizona Senator John Kyl is a major proponent of cutting taxes on inherited wealth, having been instrumental in the one year hiatus of the inheritance tax in 2010 and cutting a deal with Obama to keep the reinstatement of the tax at 35%. Oh, by the way, eliminating the estate tax is a major priority of the Club For Growth, which just has happened to donate $155,753 to the Senator's election campaigns since 1989.
• Texas Senator John Cornyn has opposed Obama's attempts to repeal oil and gas industry tax breaks besides opposing the President's ban on Gulf oil drilling. Oh, by the way, oil and gas industry components have given the Senator $1.7 million since 2001.

- From our August 15, 2012 post:

http://loathemygovernment.blogspot.com/2012/08/the-slime-sleaze-immorality-and_15.html

we find out how alternative energy and alternative vehicle industries are also knee deep in buying and selling of America:

According to an ABC News report, Fisker Motors is a Finland based automotive company that is working to develop expensive electric cars. Unfortunately, two years ago, the Obama administration approved a taxpayer backed loan for $529 million for this Finnish company to help with their technology development.

Why did U.S. taxpayer dollars back a government loan to a Finnish auto company to develop and build cars in Finland with Finnish workers? Could crony capitalism be at work again:

• One of Fisker's biggest financial supporters is the California venture capital firm Kleiner Perkins Caufield & Byers. Kleiner Perkins partner John Doerr, a California billionaire, hosted President Obama at a February dinner for high-tech executives at his secluded estate south of San Francisco.
• Doerr and Kleiner Perkins executives have contributed more than $1 million to Federal political causes and campaigns over the last two decades, primarily supporting Democrats.
• Doerr serves on Obama's Council on Jobs and Competitiveness.
• Former Democratic Vice President Al Gore is another Kleiner Perkins senior partner.

Now you start to understand that giving money to a Finnish car company to make a high end niche car model that the average American will never be able to afford has more to do with cronyism and campaign donations than sound government decision making.

But the auto cronyism is not confined to Fisker:

• The Department of Energy has also invested almost another half a billion taxpayer dollars with a loan to another electric car manufacturer, Tesla Motors.
• SEC filings show that Tesla has never had a profitable quarter and has no experience in mass auto production. It eventually wants to “mass produce” an electric car that costs about $57,000. Mass produce, car, and $57,000 in one sentence is one of the biggest incongruities of all time.
• A former Tesla board member, Steve Westly, is an Obama campaign donation bundler who raised hundreds of thousands of dollars for the President in 2008 and for his 2012 re-election campaign.
• The Westly Group was also a financial supporter of Tesla Motors until Tesla went public in 2010, and Westly continues to back the company.
• Tesla's founder and CEO, Elon Musk, is a major political contributor who has primarily backed Democrats, including Obama.

Consider the highlights of an April 3, 2012 Washington Beacon News report, keeping in mind that Harry Reid, the majority leader in the U.S. Senate, represents the state of Nevada:

• Three large renewable energy projects, Nevada Geothermal, Ormat Nevada, and SolarReserve, all of whom have received large grants of taxpayer wealth from Obama's Energy Department, are located in Reid’s home state. Executives from all three companies have donated to Reid and his fellow Democrats' election campaigns to the tune of over $58,000 since 2008.
• Brightsource Energy, which received a $1.6 billion loan guarantee from the Energy Department and will also operate a solar facility in Nevada, has donated at least $21,600 to Democrats' election campaigns since 2008. It has donated zero dollars to Republicans.
• Reid received almost $4,000 from Brightsource executives in the 2010 cycle, including $2,400 from CEO John Woolard, who hosted a fundraiser for the majority leader.
• Woolard is also a Barack Obama donor and has visited the White House almost a dozen times since Obama took office.
• Reid’s staffers have been a key part of Washington D.C.’s revolving door, setting up shop with lobbying outfits that have ties to green energy companies and the Department of Interior, which oversees such projects.
• For example, Kai Anderson, a top lobbyist for Ormat, is a former deputy chief of staff for Reid. Paul Thomsen, who handles government affairs for Ormat Nevada, Inc., is also a former Reid Staffer. Neil Kornze, the acting deputy director of policy for the Bureau of Land Management under the Department of Interior, is also a former energy staffer for Reid. Sanjay Wagle served as a renewable energy advisor at the Energy Department and he formerly worked for Vantage Point Venture Partners, a major backer of Brightsource Energy.
• Kathleen Weiss, the lead lobbyist and Vice President of First Solar, had 16 meetings at the White House with Valerie Jarrett and other senior administration staffers. In 2008, she donated $2,300 to then-Senator Ken Salazar (who is now Secretary of the Interior) and Harry Reid.
• The Department of Interior’s fast-track program was spearheaded by Steve Black, a counselor to Ken Salazar, and Janea Scott, special assistant to Black and former attorney for the Environmental Defense Fund.

- And finally, consider the obscene amount of dollars that recently flowed into the political class and their election campaign efforts as we reported on July 6, 2012,

http://loathemygovernment.blogspot.com/2012/07/money-behind-our-politics-do-you-really.html)

and think about whether you really believe that these hundreds of millions of dollars were contributed to help out the average American and for the good of the country or were they the continued buying and selling of government favors and politicians:

• Finance/Insurance/Real Estate $298,910,163
• Other $212,559,836
• Miscellaneous Business $194,198,190
• Lawyers & Lobbyists $130,201,920
• Health $116,194,309
• Ideology/Single-Issue $102,889,573
• Communications/Electronics $87,514,353
• Energy/Natural Resource $66,428,838
• Construction $54,280,646
• Labor $52,766,843
• Agribusiness $40,202,777
• Transportation $35,557,147
• Defense $15,569,517

********************************************

Okay, that is enough sleaze for now. We did not even cover all of our past reporting on political corruption and the selling of America. We did not go into the fact that while Washington politicians historically could not accept direct cash gifts from companies, unions, lobbyists, etc. they had been able to participate in insider IPO offerings that are just as lucrative, if not more so, than straight cash handouts. We did not go into the fact that politicians have been known to trade on their insider government information to play the stock market to their advantage, an advantage not available or legal for ordinary Americans.

No, the above is only a sample of how America is sold and bought every day by special interests for the good of those special interests. And that selling is still going on today, with the most recent transactions to be reviewed tomorrow, along with a set of suggestions on how to take America, and the selling of our wealth and liberties, off the market for good.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

http://www.reason.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w

Bin Laden Is Dead And GM Is Alive...But Just Barely and Other Bailout Blunders

One of the campaign slogans coming out of the Obama camp is that "Bin Laden Is Dead and GM is Alive" which tries to show the Obama administration's success both domestically and overseas. Bin Laden is indeed dead, the work of thousands of American citizens and military personnel that spanned the time from before to during the Obama administration. In other words, America finally killed Bin Laden, Obama was present and able to give the order that culminated the work of many, but America finished him off, not Obama.

As far as General Motors being alive, that is debatable, especially relative to the money owed to the American taxpayer, courtesy of Obama's bailout of the company. Let's recap the history of this ill fated bailout. When a company gets into financial trouble, it usually goes through the tried and true  bankruptcy proceedings that exist in this country in order to do some or all of the following:

• Void distribution contracts with existing dealers and resellers of that company's products and services.
• Void labor contracts that exist between the company and its employees.
• Restructure debt with existing bond holders and stock holders.
• Sell off divisions or shut down unprofitable divisions.
• Look to restructure or default on existing debt obligations to suppliers, vendors, etc.

Companies go through this type of thing all the time, no big deal and no government intervention required, just a judicial proceeding. However, in order to preserve some level of loyalty with Obama's labor interests, his administration unnecessarily stuck itself in the middle of what should have been a typical bankruptcy proceeding and, at last count, had not seen the return of about $25 billion worth of taxpayer bailout money that went to GM as a result of this unnecessary government intervention.

Now, some defenders of this intervention and ill use of taxpayer wealth will claim that Obama saved the car industry in this country. No, he saved some union votes. Let's illustrate via an example: in normal times, I believe the annual market for cars and small trucks in this country is about 16 million vehicles. I also recall that GM's market share of this market is about 25%.

Question: if GM went out of business, how big would the domestic car market be in this country? If you said 12 million vehicles, 16 million less GM's 25% share, you would be wrong. The size of the domestic car and small truck market would still be about 16 million vehicles. The 25% share that GM claims now would be taken up by Ford, Honda, Nissan, etc. Thus, the market would be about the same size but GM would not be a part of it. That is the fallacy in his argument.

But even if the Obama administration had stayed out of the GM bankruptcy proceedings and saved billions of taxpayer dollars, there would still be a GM today. GM might have restructured differently, GM might be smaller than it is today, GM's unions may not have gotten such a sweet deal, but GM and the domestic car market would still exist and those jobs that go into making the 16 million cars a year would still exist. They might exist at Ford, they might exist in a domestic factory of a foreign car maker, they might exist at a slimmed down GM but they would exist.

This is a long winded way of saying that the risking of tens of billions of taxpayer dollars via this bailout was insanity, especially when you look at the numbers today. According to a Huffington Post article from earlier this year,

http://www.huffingtonpost.com/2012/01/26/bailout-taxpayers_n_1233374.html,

General Motors still owes the American taxpayer about $25 billion. Although this article is a little on the old side (about five months old), I could find no more recent credible source that indicated that GM had paid back any of this debt since then. So let's go with the Huffington piece as the reality of today. As of the close of the stock market yesterday (August 2, 2012), the market value of General Motors (number of stock shares times the stock price) was about $30 billion.

If the market capitalization or value of the entire GM operation is now valued at about $30 billion, about 83% of that value would have to be used to pay back the $25 billion owed to American taxpayers.  Thus, the Obama administration has gotten us into a very bad financial situation if our debt load is more than 80% of the company's ENTIRE value. The chances of that $25 billion ever being repaid is almost zero.

That near zero possibility was laid out in the Huffington article. The writer asserts that the stock price of GM stock would have to get to almost $54 a share for the American taxpayer to break even on this investment. Given the track record of the GM stock price (double click on the graph for a larger view):

it is highly unlikely that the $54 stock price is going to be attained any time soon. And unlikely that the taxpayers of this country will get paid back any time soon.

Yes, Bin Laden is dead and GM is alive. But GM is on life support relative to the bad, unnecessary investment the Obama administration made in this company. But this is not surprising, given Solyndra, Beacon, Abound, Spectra, Ecotality, and a myriad of other poor investments his Presidency has made with taxpayer money expended and no value returned.

But let's not stop here, let's move on to other bad investments that have burned though billions of taxpayer dollars for nothing in return. Now, President Obama may not have been the overriding force behind these bad investments like he was on the GM bailout but as Senator and then President, he was in agreement with their ill fated financial principles.

 According to the same Huffington Post article, American Insurance Group (AIG) still owes the American taxpayer about $50 million. But the recent stock performance of AIG put the market value/capitalization value at about $56.2 billion. Thus, AIG's liability to the American taxpayer of $50 billion or so is about 89% of its total market value. Doubtful that AIG will ever be able to pay back the entire $50 billion taxpayer bill if what it owes is a whopping 89% of its market value.

But the damage to taxpayer wealth by the recent and current political class does not stop with these two companies. The Huffington article reports on the testimony of the inspector general of the bailout funds who told Congress that in total, 371 banks still $133 billion and that the funds are unlikely to be paid back any time soon.

Even that amount of taxpayer money would be higher since one hundred thirty-seven banks repaid their bailout money using cash from a separate Treasury-run fund, which obviously was also funded with taxpayer money. If you add in the $189 billion (and counting) of taxpayer wealth that the political class has diverted to salvage the remnants of Fannie Mae and Freddie Mac, you can easily calculate that on average, every American household paid about $3,000 of its own wealth to bailout GM, AIG, Fannie, Freddie, and 371 other banks, a total that is unlikely to decrease any time soon.

Which brings us back to a point we have made many times in this blog with one simple chart. How could the entire political class, Republicans and Democrats in Congress and the White House, and the entire Federal government (SEC, FDIC, Federal Reserve, HUD, Fannie, Freddie, Senate committees on housing and banking, House committees on housing and banking) been so oblivious to the housing bubble that was occurring over the past ten years and not taken remedial action beforehand to stop the resultant bailouts and wasting of hundreds of billions of dollars (double click on graph for a larger view):

      









How could something so obvious as the bubble on this chart by ignored or not understood by so many people in Washington? Yes, Bin Laden is dead but so is the ability of the Washington political class to think strategically and proficiently, negative traits that always get dumped on the wealth of the American taxpayer.  

Just another reason to implement Step 39 from "Love My Country, Loathe my Government." Step 39 would impose term limits on all Federal politicians, "one and done." Since most of the people in Congress, and the current resident of the White House, were present when the economic flame out occurred, requiring massive taxpayer bailouts despite advance warning, we have to assume that they were part of the problem and are unlikely to be part of the solution of efficient, competent, and effective government.

Please visit our Presidential website, "The United States Of Purple," at:

http://www.unitedstatesofpurple.com/

The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.

The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment/

Tim Geithner, AIG, and Sarbanes-Oxley For The Feds

Today we will try and link together three rather diverse concepts: the Treasury Secretary, an insurance company, and an accounting law. The Treasury Secretary is Tim Geithner, formerly the head of the Federal Reserve Board Of New York and one of the many Obama Cabinet nominees that had failed to properly pay his taxes. Recent reports from the Associated Press and other sources have shown that there may have been some shady dealings going on between the Federal Reserve Board of New York and an insurance company, AIG, during the frenzy of giving away taxpayer money to financial institutions last year. The details include the following:

• AIG was one of the biggest insurers in the world and was positioned by those in political power to be "too big to fail," i.e. if AIG went under, a single company, all of the world's financial markets would crumble.


• The American taxpayer is on the hook to AIG's survival for about $180 billion. Put another way, each American household donated about $1,400 to keep AIG afloat.


• Many of the financial assets that the big banks purchased through the years were bonds backed by subprime mortgages and other questionable loans. These banks bought insurance from AIG as a precaution in case the loans went bad.


• The majority of the loans went sour, causing the great financial losses for most banks. This meltdown in assets lead to TARP and the giveaway of billions of dollars to the banks, rewarding them for making horrible investments. As we have discussed this past week, the fact that most of these bailouts have already been repaid just months after having been received indicates that the danger to the banking system was grossly exaggerated.

This is where Geithner and the New York Fed comes into play. As the investments went bad, the banks came to AIG to exercise their insurance policies. However, AIG was no longer financially sound either and could not cover the entire value of the insurance policies they had sold to the banks. In cases like this, negotiations are usually started with a bankrupt-approaching company by its creditors to see what percentage of their stake they can get back. For example, let's assume that AIG could only cover 20% of the face value of its policies. After much negotiation, probably some lawsuits, the plaintiffs, i.e. the banks, would have to reach a settlement, picking over the 20% carcass that was once AIG.

However, it appears that the Fed and possibly Geithner did not allow this negotiation process of downgrading the returns to the banks to occur, using taxpayer money to pay out the AIG insurance policies at 100% of face value. This is in contrast to the Bush bailout of GM and Chrysler, both of which had to make many concessions from both management and the unions before they could receive any taxpayer money. There were no concessions from the banks holding AIG policies, they just got everything they wanted.

And it gets worse. According to a January 8, 2010 Associated Press report, email exchanges between lawyers for the New York Fed and AIG show that "the New York Fed wanted AIG to withhold information about deals that sent billions from the taxpayer bailout of AIG to Goldman Sachs, Inc., Societe Generale and other major banks." Thus, not only was there possibly a big and unnecessary giveaway of taxpayer dollars, there may be a cover up to the giveaway. Congress, as always late to the party, is scheduling hearings to address both the lack of negotiations and the suppressing of information. Congressman Darrell Issa correctly questions the lack of transparency and accountability regarding taxpayer assets in this matter.

Which leads us Sarbanes-Oxley. This bill was passed as a result of the gross accounting violations that occurred during the Clinton administration that resulted in a few people getting very rich, but eventually going to jail, and causing companies to fail, employees to lose both their jobs and their pension investments, and the passage of an onerous bill that does nothing but waste American business resources. Sarbanes-Oxley requires that a public company produce a ton of backup accounting materials attesting to the accuracy of their corporate books. These reporting requirements take up a lot of personnel and other corporate resources that could be better deployed by making American business more competitive. The tragedy of this law is twofold:

• First, the vast majority of the materials are never reviewed by anyone. They have to be produced but do not have to be reviewed by the government. What a waste.


• Second, the law apparently does not work. It did not produce the right documents and accounting indicators for companies such as AIG, Lehman Brothers, Bear Sterns, and other financial firms that quickly went out of business. One would think that an accounting law supposedly designed to provide investors a true picture of a firm's financial health would have been able to flag the horrible financial status of those Wall Street firms that went belly up so quickly.

Thus, we have a government running amok and wasting taxpayer money without any accounting and transparency controls in place and we have a Federal law with too many of the wrong controls in place since they do not work, as witnessed by the sudden bankruptcies of the financial firms. Thus, we did need to do two things with the Sarbanes Oxley principles as outlined in "Love My Country, Loathe My Government:"

Step 46 - Subject all government agencies, including Congress, to a strict auditing process, similar to Sarbanes-Oxley procedures, to ensure prudent use of taxpayer assets and funds. In this step we are hoping for accounting procedures that work, i.e. they are rigid, thorough and identify fraud and waste, as opposed to the current Sarbanes-Oxley law for businesses that is rigid, thorough and does not identify fraud and waste. "Love My Country, Loathe My Government" has numerous examples of where this step might have save billions of dollars of taxpayer taxes if in place. This current Geithner/AIG situation would also lend itself to Step 46 by providing the details, transparency, and accountability that Congressman Issa laments is lacking.

Step 48 - Repeal the Sarbanes-Oxley law for American business immediately. The vast majority of companies in this country have never been found guilty of corporate accounting malfeasance and those that have been accused have been convicted. The recent failures of financial institutions are proof the law does not work and just wastes resources. You cannot say you have a viable accounting tracking law if a company is in business today and out of business tomorrow, e.g. Lehman Brothers, and nobody sees it coming, including the government which is supposed to track the output of Sarbanes-Oxley activities.

Another step from "Love My Country, Loathe My Government" is also applicable here:

Step 34 - Hold House and Senate committees and subcommittees accountable for their respective areas of responsibilities and remove committee members from committee posts if they do not meet minimal performance criteria. If the accusations are right and AIG did improperly funnel taxpayer dollars to healthy banking firms, those members of Congress that sit on those Congressional committees responsible for the funneling should be held accountable for the waste and be replaced immediately on the committee.

The political class needs to be introduced and subjected to the concept of accountability. They have wasted enough of our tax dollars already without any ramifications to anyone who should have known better. By making them accountable, maybe the politicians in Washington might finally anticipate a problem for once and save us all a few dollars.

Visit our website at www.loathemygovernment.com to order an autographed copy of the book, "Love My Country, Loathe My Government -Fifty First Steps To Restoring Our Freedom and Destroying The American Political Class" and to sign up for the cause. The book is also available online at Amazon and Barnes And Noble.

What's A Few Billion Dollars Among Friends?

As always, it is always so easy to come up with examples of the political class wasting a billion or two of taxpayer dollars. In an AP article today, as posted on earthlink.net, the Inspector General in charge of auditing the $700 billion financial industry bailout, Neil Barofsky, issued a report critical of Treasury Secretary Tim Geithner. Mr. Geithner was the head of the New York Fed prior to his current assignment. In that job, his office was responsible for overseeing the bailout of insurance giant AIG. (note: as a side note, you might remember Mr. Geithner's name from previous posts that outlined how he failed to pay about $30,000 in back taxes until he was nominated to be Treasury secretary. For some reason, despite the tax shortfall, he still got the job.)

You may remember that last fall AIG received $180 billion in taxpayer bailout money for 1) being totally incompetent in managing its business and 2) convincing the political class that the world would end along with the world's financial system if it was not bailed out. Despite being incompetent, AIG took $1,75 billion of that taxpayer money and paid out bonuses to its employees. Besides being an outrageous flushing of taxpayer dollars, Geithner looks especially bad in the Barofsky report since he has always claimed he was unaware of the payouts until March, 2009. However, the report proves his staff at the NY Fed knew of the payments back in November, 2009. Thus, Geithner is either incompetent since he was managing taxpayer giveaways without knowing where the money was going until March, even though his staff knew in November, or he his trying to cover his mistakes by saying he did not find out until March but did indeed know in November, along with the rest of his staff, but allowed it to happen anyway.

As if that screw up it not bad enough, consider the following quote from the article:

"In a report released Tuesday, Barofsky wrote that Treasury did not understand AIG's pay structures when it gave the firm billions in aid last fall. He said Wednesday that officials at the New York Fed "still did not have their arms wrapped around" AIG's compensation structure when he finished his audit last month."

Thus, according to the inspector general, almost one year after the multi billion dollar bailout, the Fed STILL does not know what they are doing. Unbelievable that the political class could throw together a massive bailout using taxpayer money, allow large bonuses to go to people in AIG, many of whom were responsible for a lot of the financial meltdown, and eleven months later still not even know the whole picture.

This is just another instance that the book, "Love My Country, Loathe My Government", addresses in some of the proposed steps to fix the country. Step 34, a step that remove politicians from committee and subcommittee posts for lax oversight, would be a perfect remedy here. Those politicians that were sitting on committees overseeing the bailout funds should be removed for this gross incompetence in the AIG matter. Step 1, the downsizing of government, is another step that would address this problem since with fewer things to do in a downsized government, the chance for multi billion dollar screw ups would also go down.